Unless a new source of money materializes, the Lower 9th Ward Health Clinic will close its doors on Dec. 31, leaving the iconic neighborhood without its own medical clinic more than five years removed from a deluge when a barge smashed through the wall of the Industrial Canal during Hurricane Katrina.

Ellis Lucia / The Times-PicayuneNurses Alice Craft-Kerney (left) and Pat Berryhill, who started the Lower Ninth Ward Health Clinic at 5228 St. Claude Ave., pose at the facility in 2007. Without a cash infusion, the clinic will close on Dec. 31.

Executive Director Alice Craft-Kerney, who has run the clinic since it opened Feb. 27, 2007 at 5228 St. Claude Ave., said she has run out financial options for an operation that has served more than 2,500 different patients and, at its peak, averaged 80-85 patients each week.

"We don't turn anyone away," she said, noting that about 90 percent of the clinic's patients have no form of insurance. "You could say we have been a victim of our own success."

She said the clinic, already suffering cash flow problems for months, is not strong enough to qualify for a new financing model that the state is in the process of developing with federal officials as part of the Medicaid program for primary care services.

That system, expected to be announced in January, almost certainly will require participating clinics to meet certain operational requirements, such as having a chief financial officer, that Craft-Kerney said her organization cannot afford. Those benchmarks are higher than what was required to get a cut of the $100 million post-Katrina grant that Congress approved to re-establish primary care after the flood. Similar barriers exist to becoming a Federally Qualified Health Center, a designation that would open additional federal financing paths.

Craft-Kerney said she has started to refer patients to the closest clinic: Daughters of Charity's clinic at the old St. Cecilia School in Bywater. But she said "crossing the Industrial Canal is still a barrier" for residents who viewed their own neighborhood clinic as a sign of Katrina recovery. She also noted that the Louisiana State University system has consolidated some of its bank services into a new clinic at L.B. Landry High School across the Mississippi River.

"There is something to be said for having these services within walking distance or even one bus, instead of sending people all over town," she said.

The clinic's brief history is both a shining example and now a rare setback in the proliferation of neighborhood-based primary care around the New Orleans region since the 2005 storm season.

Long focused on institution-based care, particularly the state charity hospital system, local providers and public health officials used the flood as an impetus to remake the health care system, in part using the grant from Congress.

The result was a network of 90-plus primary care clinics run by 25 organizations, from giants like Louisiana State University and Tulane to the lone shops like the one Craft-Kerney founded along with Patricia Berryhill. Both women are registered nurses and former residents of the surrounding neighborhood.

But the grant had a three-year span, with the final payouts distributed in early 2010. Craft-Kerney noted that the money was never intended as the only source of financing for recipients, but she said the challenge of generating revenue from poor and low-income patients proved too difficult.

She said the clinic, like most in the network, charged a nominal fee, usually $25. "For the most part, our patients complied," she said. "But that's not a co-pay, because there's no insurance reimbursement that follows."

Craft-Kerney said her paid staff, which at its peak included two part-time physicians, two nurses and a handful of medical assistants, has never included a grant writer. "We've applied for some grants and not gotten them," she said.

The monthly operating costs peaked at about $60,000, she said, a figure that does not include rent because the owner of the 5228 St. Claude Avenue provided the space for free. That arrangement was always set to end this month, she said. The AARP provided volunteers for clerical work.

Because of the business model, cash flow problems have been a constant concern and reached critical levels earlier this year when Craft-Kerney said she could no longer pay the two physicians that split time to make one full-time equivalent.

Craft-Kerney said she has continued to provide nursing services, consulting on disease management and instruction on overall health management. She said she hopes to continue those programs even without a store front.

"I'm looking for partnerships in the community where we can keep those kinds of programs up," she said, saying that she has worked to establish trust among residents around the clinic. "They've always known they could get quality care here."

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Bill Barrow can be reached at bbarrow@timespicayune.com or 504.826.3452.